Bitcoin – Fraudulent attacks on digital currency

QUOTE: Bitcoin, and other digital currencies such as Litecoin and Peercoin, will change the way we exchange money. But they come with a major flaw: they can also be used to turn infected computers into devices that “print” money. The beauty of the algorithm behind Bitcoin is that it solves two main challenges for cryptocurrencies – confirming transactions and generating money without causing inflation – by joining them together. Confirmations are given by other members of the peer-to-peer network, who in return are given new Bitcoins for their labour. The whole process is known as “mining”.

When Bitcoin was young, mining was easy. You could earn Bitcoins by mining on a home computer. However, as the currency’s value grew (from $8 to $1000 during 2013) – more people applied to do it, and, in response, mining became (mathematically) harder and required more powerful computers. Unfortunately, those computers don’t have to be your own. Some of the largest botnets run by online criminals today are monetized by mining. Any infected home computer could be mining Bitcoins for a cybercrime gang.